Homeowners who are facing unemployment have been seeking ways to make their mortgage more affordable. Typically, home loan modification plans have been sought out by those who have either lost their job or have seen a reduction in their income due to cutbacks at their place of employment. Yet, unemployment mortgage assistance programs were made available to certain homeowners which offered mortgage payment reductions and forbearance programs.
However, there has been concern over whether these programs will be helpful to long-term unemployed homeowners if a tier 5 benefits extension wasn’t passed. Those who have been out of work for 99 weeks or more have called for an unemployment benefits extension to go beyond the current extensions and many were using unemployment mortgage assistance plans as reason for the tier 5 extension.
Previously, homeowners who were seeking an unemployment mortgage assistance plan were asked to show they had some income, and many used unemployment insurance for these mortgage assistance requirements. Yet, there have been some changes from Fannie Mae which state that unemployment benefits can no longer be used as proof of income.
While this may cause concern for some homeowners who were attempting to get mortgage modification assistance, there may be forbearance options still available to unemployed homeowners through programs like the Home Affordable Unemployment Program. Forbearance options may be helpful for homeowners whose only income is from unemployment benefits, but obviously it is not a long-term solution.
Yet, one reason unemployment benefits are no longer allowed to be claimed in some cases is because there is no sustainability for homeowners in the long run. While modification plans and other mortgage assistance initiatives continue, frustrated homeowners continue to cry out that more be done in the area of job creation since home loan troubles will only truly be solved when there are stable jobs available.